Articles

Service Hotline: Mo to Fr 9am-6pm (CST) +86 10 6561 6609

On 19 June 2018, the draft amendment of Individual Income Tax (IIT) Law was submitted to the Standing Committee of the National People's Congress for deliberation.

Transfer price is the setting of the price for goods and services transacted between controlled or related legal entities within an enterprise. Article 9 of the OECD (Organization for Economic Cooperation and Development) Model Tax Convention is dedicated to the ALP (Arms Length Principle). It regulates that the transfer price within a multi-entity company should be established based on similar transaction done between independent entities.

 

euro bills scheine200x200 

 

What do we mean by Transfer Pricing Services?

 

As approximately two-thirds of cross-border transactions take place between associated enterprises part of the same multinational group, compliance with transfer pricing is a fact, which every multinational has to deal with. Pressure from international and regional organizations require full compliance with the arm’s length principle. The importance of such element is reflected in the circumstance that increasingly MNE groups rank transfer pricing as one of the highest risks to be managed, from a reputational as well as from a tax standpoint.

Thanks to our significant platform of multinational groups, we are constantly able to tackle the most challenging issues associated with the commercial and financial relations existing in transactions between associated enterprises. We have at our disposal access to the commercial and financial databases needed to perform a thorough comparability analysis.

 

 

What do we offer?

 

Transfer Pricing Planning and Documentation

 

Ecovis transfer pricing professionals assist taxpayers with home country and foreign documentation requirements by preparing transfer pricing documentation reports that analyse the arm’s length nature of their intercompany transactions. This includes supply of goods, provision of services, as well as intercompany financial transactions. We can also assist multinationals with multiple foreign affiliates to prepare global documentation, including Country-by-Country reporting, meeting all of their documentation requirements in an efficient basis, which is compliant with international recommendations.

 

 

Dispute Avoidance: Advance Pricing Agreements (APAs)

 

Ecovis transfer pricing professionals assist clients with all aspects of defending their transfer prices before the tax authorities and with local audit teams. If an audit results in a transfer pricing adjustment, Ecovis helps obtain double tax relief through the tax treaty competent authority process. Ecovis also helps clients negotiate Advance Pricing Agreements (APAs) to obtain prospective transfer pricing certainty.

 

 

Dispute Resolution: Examination Defense and Mutual Agreement Procedure/Competent Authority (MAP/CA)

 

Ecovis works with clients to explore strategic opportunities to enhance global tax and treasury planning, by aligning the relationship between the taxpayer’s value drivers and income/cost streams to improve their effective tax rate (ETF). This can include supply chain and intellectual property strategies and global charges. Ecovis transfer pricing services help integrate operational and tax decisions in a way that allows clients to treat tax as another cost of doing business making strategic decisions on an after-tax basis.

 

 

Business Model and Supply Chain Optimization

 

In light of today’s dynamic global economic environment and the potential for legislative changes, assessing a multinational’s global business model may no longer be an optional exercise. Ecovis team of transfer pricing professionals provides high quality, customized tax and business model transformation services.

 

 

What do we offer here at Ecovis Beijing?

 

Though China is not a member of the OECD, the Chinese tax authority has followed the recommendations by the OECD and adopts very strict local-flavoured transfer pricing laws and regulations. Related party transactions have been a focus, especially after its commitment into the BEPS (Base Erosion and Profit Shifting) Action. Even though transfer price was in the past more of a topic of concern for larger multinational companies, as a result of the globalisation and the continued growth of international trade, transfer pricing has also become an issue of increasing interest for small and medium sized companies.

Companies should take it very seriously and document their transfer pricing policies in China, in case any tax audit happens.

 

 

Ecovis China team can offer the following:

 

  • Transfer pricing planning

  • Transfer pricing documentation

  • Dispute resolution

 

Contact us to learn more about how we can assist you to meet standards for transfer pricing documentation, reporting and dispute resolution - call our office at +86 10 6561 6609 or write us an email to This email address is being protected from spambots. You need JavaScript enabled to view it. 

 

 

 

 Richard2017 150x225  

Richard Hoffmann

 

Richard Hoffmann is a partner at ECOVIS Beijing China. Richard obtained an honors degree in law and worked in Germany, the United States, and China for various prestigious law firms prior to joining ECOVIS. In addition to being a member of the board of ECOVIS International, he is Supervisor for the China business of a respected German company and shares his extensive knowledge to students by teaching commercial law in China at SRH Hochschule Heidelberg. He has published more than fifty articles in international magazines, frequently speaks at high profile events in China and abroad and is often invited as a legal expert by international TV stations. Contact: This email address is being protected from spambots. You need JavaScript enabled to view it. 

Ecovis Beijing is the trusted tax and legal advisor to several embassies and official institutions in China. It specializes in mid-sized international companies and is focused on tax & legal advisory, accounting and auditing. If you’re interested in finding out more about tax and legal, don’t hesitate to sign up for our Newsletter, give us a call +86 (10) 6561 6609 or contact us directly via This email address is being protected from spambots. You need JavaScript enabled to view it.
Linkedincontact ecovis beijing

 

 

 

The software company from Walldorf is a global leader in business process software. It is right at the center of the “Industry 4.0” and “Internet of things” development.

Data Security n China

At the end of 2018, the grace period for implementing the new Chinese Cybersecurity regulations will expire. ECOVIS Beijing explains which sanctions can be imposed for violations.


At the end of 2018, the grace period for implementing the new Chinese Cybersecurity regulations will expire and since 1 May 2018, new data protection standards are in place.

 

In order, to ensure compliance with recently adapted and clarified standards, the government also intends to sanction non-compliant companies. The following table shows several sanctions which are imposed for violations. In addition to the depicted sanctions, there are furthermore or less severe penalties. These range from a warning, the loss of the right to operate in China, to a 15-day detention.

 

Sanctions for Violating the Cybersecurity Law

 

The Cyber Security Law includes sanctions for various violations, including insufficient network security and non-compliance with administrative requests. A list of the respective violations and sanctions is outlined below:

 

Violation Sanction
Deficient protection of network security (Art. 59) Fine from 10.000 to 50.000 CNY
Ineffective methods of removing a product or non-compliant services (Art. 60) Fine from 50.000 to 500.000 CNY
Not taking measures against customers or users with false ID-information (Art. 61) Fine from 50.000 to 500.000 CNY; temporary business closure; closing of websites; revocation of business licenses
Violation of personal data (Art. 64) Confiscation of illegally gained revenue and a fine of one to ten times as high as the gains; or a fine up to 1 million CNY
Illegal transfer of personal data (Art. 68)

Fine from 50.000 to 500.000 CNY; temporary shut down of the business; closing of all websites; loss of business licenses



 

Although the Cybersecurity law is enforced since the 1st June of 2017, companies have time to adapt to the new regulations until 31 December 2018. The main focus of the law lies on large-scale state-owned enterprises and companies which accept users who publish false information on their platform. By doing this, the Chinese government also does not hesitate to punish larger and well- known companies. The most famous recent case was that of Alibaba which cloud-service activity was investigated.

 

Advice from ECOCIS Beijing

 

Even though Chinese authorities have so far focused on large corporations and eye-catching incidents, small companies and foreign SMEs must not be complacent about regulatory risks.

 

ECOVIS Beijing can provide you with a cybersecurity health check. We can verify if the website provider has qualified licenses or whether it qualifies for online payments.

 

It is also possible to assess the cybersecurity of online trading or the security of the payment process. Furthermore, we review the lawfulness of the collection of personal information or the process of collecting, transmitting or storing data. Finally, we can evaluate whether the public and/or corporate server complies with the law.

 

If you have further questions about cybersecurity in China, feel free to contact This email address is being protected from spambots. You need JavaScript enabled to view it. at any time. 

 

With contributions by Kani Oezdemir

 Richard2017 150x225  

Richard Hoffmann

Richard Hoffmann is a partner at ECOVIS Beijing China. Richard obtained an honors degree in law and worked in Germany, the United States, and China for various prestigious law firms prior to joining ECOVIS. In addition to being a member of the board of ECOVIS International, he is Supervisor for the China business of a respected German company and shares his extensive knowledge to students by teaching commercial law in China at SRH Hochschule Heidelberg. He has published more than fifty articles in international magazines, frequently speaks at high profile events in China and abroad and is often invited as a legal expert by international TV stations. Contact: This email address is being protected from spambots. You need JavaScript enabled to view it.

Ecovis Beijing is the trusted tax and legal advisor to several embassies and official institutions in China. It specializes in mid-sized international companies and is focused on tax & legal advisory, accounting and auditing. If you’re interested in finding out more about tax and legal, don’t hesitate to sign up for our Newsletter, give us a call +86 (10) 6561 6609 or contact us directly via This email address is being protected from spambots. You need JavaScript enabled to view it.
Linkedincontact ecovis beijing
Five Insurances in China

Since 2011, expats working in China need to contribute to country's Social Security System. ECOVIS Beijing explains the main features and what foreign employees and businesses need to know. 

Point System

Work Visas are an important issue for all expats living and working in China. In order to help foreigners check their prospective score, we have created a calculator. 

Events

NEWSLETTER

Newsletter

 

 

Business Hotline:

+86 10 6561 6609

Monday - Friday 9am - 6pm

China Standard Time

This email address is being protected from spambots. You need JavaScript enabled to view it.

 

ECOVIS Beijing
Room 1105, DRC Building, No. 19 Dongfang East Road, 

Chaoyang District, Beijing, 100600

 

 

China Desk in Heidelberg

Lenaustrasse 12, 69115 Heidelberg

Germany

Argentina
Australia
Austria 
Belgium 
Brazil 
Bulgaria 
China

Colombia

Croatia 

Cyprus 
Czech Republic
Denmark 
Estonia

Finland
France 
Germany

Greece

Hong Kong
Hungary
India 
Indonesia 
Ireland

Israel 
Italy  
Japan 

Latvia

Liechtenstein 

Lithuania
Luxembourg

Macedonia
Malaysia 
Malta 
Mexico

Netherlands 
New Zealand 
Poland 
Portugal

Qatar
Romania 
Russia 
Serbia

Singapore  
Slovakia 
Slovenia

South Africa

South Korea 
Spain 
Sweden

Switzerland

Taiwan

Thailand

Tunisia
Turkey
Ukraine  
United Kingdom

United States 
Uruguay